Glossary of Financial Terms

American Depositary Receipts (ADRs) - A negotiable certificate issued by a U.S. bank representing a specific number of shares of a foreign stock traded on a U.S. stock exchange.

Alpha - Measures the difference between a fund’s actual returns and its expected performance, given its level of risk.

Asset-Backed Securities - Securities that represent a participation in, or are secured by and payable from, payments generated by credit cards, motor vehicle or trade receivables and the like.

AUM, or Assets Under Management - Defined as all client assets managed by or deposited with a financial services firm for investment purposes.

Bank Deposits - Cash, checks or drafts deposited in a financial institution for credit to a customer's account. Banks differentiate between demand deposits (checking accounts on which the customer may draw) and time deposits, which pay interest and have a specified maturity or require 30 days' notice before withdrawal.

Barclays Capital U.S. Government Credit Bond Index - An unmanaged index that includes U.S. Government and investment-grade corporate securities with at least one year to maturity.

Barclays Intermediate Aggregate Bond Index – An unmanaged index representing investment-grade debt issues with maturities between three and ten years.

Below Investment-Grade (High Yield) Securities - Lower rated, higher yielding securities issued by corporations. They are generally rated below investment-grade (i.e., Ba1/BB+ and below) by national bond rating agencies, or if unrated, are judged by the Adviser to be of equivalent quality. They are considered speculative and are sometimes called ‘‘junk bonds’’.

Beta - A measure of risk which shows a fund’s volatility relative to an index.

Blue Chip Stocks - Large established companies with long records of historical profit growth, that also often tend to pay dividends.

Bond - A long-term promissory note in which the issuer agrees to pay the owner the amount of the face value on a future date and to pay interest at a specified rate at regular intervals.

Bottom-Up Investing - An investing approach in which securities are researched and chosen individually with less consideration given to economic or market cycles.

Call Option - An agreement that give an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.

Capital Gains - The profit realized when a capital asset is sold for a higher price than the purchase price.

Citigroup Broad Investment Grade Index – an unmanaged index generally used for managing broad debt portfolios from short to long-dated maturities, similar to the Barclays Capital Aggregate Bond Index or the Merrill Lynch Domestic Master.

Closed-End Fund - Registered investment companies that typically issue a fixed number of shares that trade on a securities exchange or over-the-counter.

Convertible Securities – Fixed income or equity securities that pay interest or dividends and that may be exchanged on certain terms into common stock of the same corporation.

Convexity - A measure of how the duration of a bond changes as an interest rate changes. The greater the convexity of a bond the greater the exposure of interest rate risk to the portfolio.

Correlation - A statistical measure of how two securities move in relation to each other.

Corporate Bonds - Fixed income securities issued by corporations.

Corporate Debt Securities – Fixed income securities issued by businesses. Notes, bonds, debentures and commercial paper are the most prevalent types of corporate debt securities. A fund may also purchase interests in bank loans made to companies. The credit risks of corporate debt securities vary widely among issuers.

Covered Call - An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on the same asset in an attempt to generate increased income from the asset.

Debentures - Bonds or promissory notes that are secured by the general credit of the issuer, but not secured by specific assets of the issuer.

Defensive Strategy – There may be times when a Fund takes temporary positions that may not achieve its investment objective or follow its principal investment strategies for defensive reasons. This includes investing all or a portion of the total assets in cash or cash equivalents, such as money market securities and repurchase agreements. Although a Fund would do this in seeking to avoid losses, following a defensive strategy could reduce the benefit from any market upswings.

Depositary Receipts of Foreign Securities – Represent ownership of securities in foreign companies and are held in banks and trust companies. They can include ADRs, which are traded in U.S. exchanges and are U.S. dollar-denominated, ETRs, which are traded on European exchanges and may not be denominated in the same currency as the security they represent, and GDRs, which are issued globally and evidence a similar ownership arrangement.

Derivative - A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties.

Diversification - The practice of investing in a broad range of securities to reduce risk.

Dividend - Distributions to stockholders of cash or stock declared by the company's board of directors.

Duration - A calculation of the average life of a bond (or portfolio of bonds) that is a useful measure of the bond's price sensitivity to interest rate changes. The higher the duration number, the greater the risk and reward potential of the bond.

EAFE Countries – Countries located in Europe, Australasia and the Far East.

Emerging Markets – Countries whose economy and securities markets are considered by the World Bank to be emerging or developing. Emerging market countries may be located in such regions as Asian, Latin America, the Middle East, Southern Europe, Eastern Europe and Africa.

European Depositary Receipts (EDRs) – An EDR is a negotiable certificate held in the bank of one country representing a specific number of shares of a stock traded on an exchange of another country.

Exchange Traded Fund (ETF) – An ETF is an investment company that seeks to track the performance of an index b holding in its portfolio either the contents of the index or a representative sample of the securities in the index.

Exchange Traded Note (ETN) – An ETN is a security that combines aspects of a bond and an ETF. ETN returns are based upon the performance of a market index or a specific strategy, and can be held to maturity as a debt security.

Expense Ratio - A fund's cost of doing business expressed as a percentage of its assets and disclosed in a prospectus.

Fixed Income Securities - Bonds and other securities that are used by issuers to borrow money from investors. Typically, the issuer pays the investor a fixed, variable or floating rate of interest and must repay the borrowed amount at a specified time in the future (maturity).

Foreign Securities – Securities issued by corporations, governments and other issuers located outside the United States. Foreign securities are subject to additional risks.

Fundamental Analysis - A method of evaluating a security by attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors.

Fixed Income Securities - Bonds and other securities that are used by issuers to borrow money from investors. Typically, the issuer pays the investor a fixed, variable or floating rate of interest and must repay the borrowed amount at a specified time in the future (maturity).

Foreign Securities – Securities issued by corporations, governments and other issuers located outside the United States. Foreign securities are subject to additional risks.

Fundamental Analysis - A method of evaluating a security by attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors.

Global Depositary Receipts (GDRs) – GDRs represent ownership of securities in foreign stock and are issued by a foreign bank. GDRs are generally denominated in foreign currencies and may not be denominated in the same currency as the securities they represent. Generally, GDRs are designed for use in the foreign securities markets.

Growth at a Reasonable Price (GARP) – GARP investing involves buying stocks that have a reasonable price/earnings ratio in relationship to a company’s earnings growth rate.

Growth Style Investing - An investing approach that involves buying stocks of companies that are generally industry leaders with above-average, sustainable growth rates. Typically, growth stocks are the stocks of the fastest growing companies in the most rapidly growing sectors of the economy. Growth stock valuation levels (e.g., price-to-earnings ratio) will generally be higher than value stocks.

Hedged Mutual Fund – A mutual fund that uses short-selling, hedging or other alternative strategies. Short-selling and other hedging instruments may be used in an effort to manage risk or to profit from downward movements of securities or markets. The risks of hedged mutual funds may differ and are sometimes greater than conventional mutual funds.

iMoneyNet First Tier Retail Average - An average consisting of non-government funds that hold paper considered to be of the highest credit quality by at least one nationally recognized statistical rating organization.

Index Fund - A fund designed to mirror the performance of a specific market index, such as the S&P 500 Index.

Individual Retirement Account (IRA) - A retirement investing tool for employed individuals that allows an annual contribution of 100 percent of earned income up to a maximum of $4,000 (for 2006). Some or all of the contribution may be deductible from current taxes, depending on the individual’s adjusted gross income and coverage by employer-sponsored qualified retirement plans.

Intrinsic Value – Estimation of a company’s actual value, irrespective of the stock price of the company.

Investment Company - A firm that invests the pooled funds of retail investors for a fee. By aggregating the funds of a large number of small investors into a specific investment an investment company gives individual investors access to a wider range of securities than the investors themselves would have been able to access.

Investment Objective - The goal that an investor and a mutual fund seek together. Examples include current income, long-term capital growth, etc.

Issuer - The company, municipality or government agency that issues a security, such as a stock, bond or money market security.

Large-Cap Stocks - Stocks issued by large companies. Unless otherwise defined by a fund manager or the Adviser, a large-cap company is defined as one with a market capitalization of $5 billion or more. Typically, large-cap companies are established, well-known companies; some may be multinationals.

Limited Partnerships – A business organization with one or more general partners who manage the business and are personally liable for the partnerships’ debts, and one or more limited partners who are liable only to the extent of their investment in the partnership.

Management Fee - The amount that a mutual fund pays to the investment adviser for its services.

Market Capitalization - Value of a corporation or other entity as determined by the market price of its securities.

Mid-Cap Stocks - Stocks issued by mid-sized companies. Unless otherwise defined by a fund manager or the Adviser, a mid-cap company is defined as one with a market capitalization between $1.5 billion and $5 billion, which is similar to the range of the Standard & Poor’s MidCap 400 Index (S&P 400).

Money Market Securities - Short-term fixed income securities of federal and local governments, banks and corporations.

The MSCI EAFE & Emerging Markets Index - Measures market performance in the global developed and emerging markets excluding the U.S. and Canada.

MSCI EAFE Index - A market capitalization weighted index, it is broadly accepted as a benchmark of non-American shares and is used by most international mutual funds to measure their performance.

MSCI World Ex-U.S. Index – An unmanaged index designed to provide a broad measure of stock performance throughout the world, with the exception of U.S.-based companies.

Morningstar - A mutual fund performance monitor that offers independent investment research via extensive line of Internet, software, and print-based products to help investors reach their financial goals.

Morningstar Rating System - A system created by Morningstar Inc. Which ranks mutual funds based on their risk-adjusted performance over various periods. 5 stars is best, 1 star is worst.

Multi-Cap Strategy – Invests in the equity securities of issuers of any market capitalization, and generally will hold securities of issuers representing a range of sizes.

Mutual Fund - An investment company that stands ready to buy back its shares at their current net asset value. Most mutual funds continuously offer new shares to investors.

Net Asset Value (NAV) - The per share value of a mutual fund, found by subtracting the fund's liabilities from its assets and dividing by the number of shares outstanding. Mutual funds calculate their NAVs at least once a day.

No-Load Fund - A mutual fund whose shares are sold without a sales charge and without a 12b-1 fee of more than 0.25% per year.

Preferred Stock - Stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation.

Prospectus - A formal written offer to sell securities that sets forth the plan for a proposed business enterprise, or the facts concerning an existing one that an investor needs to make an informed decision.

Put Option – An agreement that gives an investor the right (but not the obligation) to sell a stock, commodity, or other instrument at a specific price within a specified time period.

Qualitative Analysis - A securities analysis that uses subjective judgment based on non-quantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations.

Quantitative Analysis - A business or financial analysis technique that seeks to understand behavior by using complex mathematical and statistical modeling, measurement and research.

Risk/Reward Trade-Off - The principle that an investment must offer higher potential returns as compensation for the likelihood of increased volatility.

Royalty Income Trusts – These can be organized in a variety of ways in the United States, Canada and other countries. Beneficial units in royalty and income trusts generally represent a profits interest in the production of oil or other minerals.

Rule 144A Securities - Restricted securities that can be sold to qualified institutional buyers under the Securities Act of 1933, as amended. Rule 144A securities may increase the illiquidity of a fund’s investments in the event that an adequate trading market does not exist for these securities.

R-Squared - The percentage of a fund’s movement that can be explained by movements in its benchmark index.

Russell 1000 Index - An unmanaged index which measures the performance of the 1,000 largest companies in the Russell 3000 Index (which contains the 3000 largest stocks in the U.S. based on total market capitalization).

Russell 2000 Index - An unmanaged index that contains the 2000 smallest common stocks in the Russell 3000 (which contains the 3000 largest stocks in the U.S. based on total market capitalization).

Russell 2000 Growth Index - Comprised of securities in the Russell 2000 Index with a greater than average growth orientation. Companies in this index tend to exhibit higher price to book and price-earnings ratios.

Russell Midcap Index – An unmanaged index that measures the performance of the smallest 800 companies in the Russell 1000 Index.

Russell Midcap Growth Index – An unmanaged index that measures the performance of those companies in the Russell Midcap Index with a greater than average growth orientation.

Russell Midcap Value Index – An unmanaged index that measures the performance of those companies in the Russell Midcap Index with a greater than average value orientation.

Sharpe Ratio - A risk-adjusted measure used to determine reward per unit of risk.

Small-cap stocks - Stocks issued by smaller companies. Unless otherwise defined by a fund manager or the Adviser, a small-cap company is defined as one with a market capitalization of less than $1.5 billion, which approximates the size of the largest company in the Russell 2000 Index.

Standard Deviation - A statistical measure of the historical volatility of a mutual fund or portfolio, usually computed using 36 monthly returns. More generally, a measure of the extent to which numbers are spread around their average.

Top-down Investing - An investing approach in which securities are chosen by looking at the industry or sector level based on market trends and/or economic forecasts.

Total Return - A measure of a fund's performance that encompasses all elements of return: dividends, capital gains distributions and changes in net asset value. Total return is the change in value of an investment over a given period, assuming investment of dividends and capital gains distributions, expressed as a percentage of the initial investment.

Turnover - The number of shares traded for a period as a percentage of the total shares in a portfolio or of an exchange.

12b-1 Fee - A mutual fund fee, named for the SEC rule that permits it, used to pay for distribution costs, such as advertising and commissions paid to dealers. If a fund has a 12b-1 fee, it is found in the fee table of its prospectus.

U.S. Government Securities - Fixed income obligations of the U.S. government and its various agencies. U.S. government securities issued by the Treasury (bills, notes and bonds) are backed by the full faith and credit of the federal government. Some government securities not issued by the U.S. Treasury also carry the government's full faith and credit backing on principal or interest payments. Some securities are backed by the issuer's right to borrow from the U.S. Treasury and some are backed only by the credit of the issuing organization. All government securities are considered highly creditworthy.

Value Style Investing - An investing approach that involves buying stocks that are out of favor and/or undervalued compared to their peers. Generally, value stock valuation levels are lower than growth stocks.

Variable Rate Securities - Securities that have interest rates that may be adjusted periodically to reflect changes in interest rates. Interest rate adjustments can either raise or lower the income generated by the securities.

Yankee Bonds - Dollar-denominated bonds issued in the U.S. by foreign banks and corporations.

Yield - A measure of net income (dividends and interest) earned by the securities in a fund's portfolio, less a fund's expenses, during a specified period. A fund's yield is expressed as a percentage of the maximum offering price per share on a specified date.

Volatility – Reflects how much the value of the markets or a security may change. High volatility means that prices change dramatically over a short time period. Low volatility means that prices do not fluctuate dramatically, but change at a steady pace. Volatility is a measure of risk.

Zero-Coupon Bonds - Debt securities that do not pay interest at regular intervals and are issued at a discount from face value. The discount approximates the total amount of interest the bond will accrue from the date of issuance to maturity.